Sunday, March 12, 2017

Florida Supremes Belt Attorney w/ 1-Year License Suspension For Improper Use Of $500 Payment Received From Client; Cash Meant To Cover Cost Of Deposition Transcripts Was 'Temporarily Borrowed' (& Subsequently Repaid) To Pay Office Expenses Instead

The South Florida Daily Business Review reports:
  • Mishandling $500 from a real estate client cost attorney Michael E. Wynn much more than he might have imagined: a year suspended from the practice of law.(1)

    A Florida Bar referee recommended a 90-day suspension and two years' probation for the Fort Myers lawyer. But the bar sought review, arguing that a year's suspension was the appropriate sanction, according to a Feb. 16 Florida Supreme Court ruling, which rejected the referee's suggestion and imposed the stiffer penalty.(2) Wynn had no prior disciplinary proceedings, according to his bar record.

    The high court has the final word on attorney discipline and sometimes exercises that authority to impose tougher sentences than referees recommend.

    In Wynn's case, the bar brought ethics charges alleging conversion of funds belonging to client Sylvia Rhodes, whom he represented in a landlord-tenant suit. It also claimed Wynn later failed to inform his subsequent employer, the Office of Criminal Conflict and Civil Regional Counsel, of the ongoing disciplinary proceedings.

    Wynn has been a member of the bar since September 2000. The parties stipulated that Rhodes paid him $500 for deposition transcripts in October 2013, but the attorney deposited the money into his operating account, rather than his trust account. About two months later, when she had not received the document, Rhodes made several inquiries. In January 2014, she learned of Wynn's financial hardships and that he'd used the money to pay electricity and other law firm bills.

    "During the conversation, respondent indicated he could obtain a loan to pay for the deposition transcripts," according to the referee report. "However Ms. Rhodes indicated she would pay the court reporter directly. Respondent further agreed to repay the funds to Ms. Rhodes when he had the financial ability to do so."

    A review of Wynn's bank records revealed he'd used the funds for business and other expenses, according to court filings.

    Rhodes dealt directly with the court reporter from that point but had no payment from Wynn for nearly a year. She requested compensation by Christmas 2014.

    "By reply email on Sept. 15, 2014, respondent reiterated to Ms. Rhodes that he had completed additional post-judgment legal services which were not part of the original representation and that the fees for services were higher than the $500 respondent owed Ms. Rhodes," the referee's report stated. "Respondent further offered to forgo billing Ms. Rhodes for the additional services in exchange for not having to remit the $500 owed."

    Wynn never executed a new representation agreement, and his client never agreed to apply the money toward legal fees. Rhodes filed a bar complaint, prompting the attorney to arrange a meeting at a local bank, where the client signed a notarized document acknowledging payment and requesting dismissal of the grievance.

    Wynn requested the bar close the case, but the bar pressed for a written response, which the attorney submitted without the "required Certificate of Disclosure form," according to court records. On that form, Wynn incorrectly completed the section for sole practitioners instead of disclosing his employer.
For the story, see Year's Suspension for Attorney Who Used Client's $500 to Pay Bills (may require subscription; if no subscription, GO HERE, then click the appropriate link for the story).
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(1) According to the court's decision, the attorney is also on the hook for $3,945.45 to cover the cost of the bar's investigation & disciplinary proceeding.

(2) The following excerpt from the court's ruling reflects the court's analysis for arriving at the stiffer penalty:
  • The Bar concedes that the referee properly found significant mitigating circumstances that weigh in favor of suspension rather than disbarment in this case. The Bar does dispute, however, the referee’s recommendation as to the appropriate length of the suspension.
    ***
    In Florida Bar v. Smith, 866 So. 2d 41 (Fla. 2004), the Court imposed a one-year suspension on an attorney who deposited a $1665 check from a client for filing fees into her operating account and then used the funds for other expenses; failed to diligently represent that client and another client in an immigration matter; and issued a worthless check. The referee in Smith found significant mitigation in the form of, among other things, very serious medical issues, an absence of dishonest or selfish motive, rehabilitation, and remorse.

    In Florida Bar v. Corces, 639 So. 2d 604 (Fla. 1994), the Court imposed a two-year suspension where an attorney intentionally debited a client trust account over $6000, used the funds to pay personal bills, then over the course of twenty months repaid the deficit in the client trust account.

    Finally, in Florida Bar v. McNamara, 634 So. 2d 166 (Fla. 1994), an attorney converted for his own use a $5000 check from a third party that was either to be held in escrow or be used to reduce his client’s tax obligation. Although the Court noted that there was evidence in the record to support several mitigating factors, we imposed a three-year suspension.

    Here, as in several of the cases discussed above, Respondent converted client funds for his own use and repaid the funds at a later time. In addition, as in [The Florida Bar v.] Frederick, he attempted to condition the repayment upon the client’s agreement not to complain to the Bar about his misconduct.

    Based on the existing case law, we conclude that the Bar is correct that a one-year suspension, followed by two years’ probation with the conditions recommended by the referee, is warranted.

    As we have noted many times, misuse or misappropriation of client funds is one of the most serious offenses a lawyer can commit, and disbarment is presumed to be the appropriate punishment. Fla. Bar v. Travis, 765 So. 2d 689, 691 (Fla. 2000). We see no reason under the circumstances of this case, even given the referee’s uncontested findings of mitigation, to impose anything less than a rehabilitative suspension.

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